Lidar makers Ouster and Velodyne agree to merge

Lidar makers Ouster and Velodyne person agreed to merge, combining astir $400 cardinal successful marketplace value.

The companies said connected Monday that they volition articulation forces to summation their competitiveness successful a marketplace conception that has seen valuations plummet arsenic investors person grown disillusioned with autonomous-vehicle technology.

Lidar, abbreviated for "light detection and ranging," is simply a sensor exertion that uses invisible lasers to make a highly elaborate 3-D representation of the sensor's surroundings. Lidar sensors are considered important components of astir each autonomous-vehicle systems presently nether development, and are uncovering expanding applications with precocious driver-assist systems arsenic good arsenic different areas of robotics.

Intense capitalist involvement successful the imaginable of self-driving vehicles led galore lidar startups to spell nationalist implicit the past fewer years. But valuations are present a fraction of what they were 2 years ago, and salient automakers including Ford Motor and Volkswagen have trimmed investments successful autonomy successful favour of much constricted driver-assist systems.

Under the deal, signed connected Friday, Velodyne shareholders volition person 0.8204 shares of Ouster for each Velodyne stock they clasp – a premium of astir 7.8% based connected Friday's closing prices for the 2 companies' stocks.

Ouster's laminitis and CEO, Angus Pacala, volition pb the combined company, which doesn't yet person an authoritative name. Velodyne CEO Ted Tewksbury, who joined the lidar shaper past year, volition seat the post-merger company's committee of directors.

"We each knew that determination is simply a request for consolidation successful the market," Pacala told CNBC. "This is america really going retired and doing it."

Pacala said the combined institution volition beryllium a much formidable competitor, with streamlined manufacturing, implicit 170 patents and what helium described arsenic "complementary lawsuit bases, partners and organisation channels."

The companies person identified astir $75 cardinal successful savings that tin beryllium realized successful the archetypal 9 months aft the transaction closes, helium said.

The combined institution volition besides beryllium comparatively flush, captious successful a marketplace wherever it has go hard for not-yet-profitable startups to rise cash. Between them, Ouster and Velodyne had a combined $355 cardinal successful currency arsenic of September 30, Pacala said.

Velodyne was an aboriginal pioneer successful automotive lidar, processing its archetypal sensor successful 2007. Its distinctive "puck" sensors were seen connected astir aboriginal autonomous-vehicle prototypes. But its aboriginal units, which outgo $75,000 each and had delicate moving parts, were excessively costly and fragile for usage connected mass-produced vehicles.

Velodyne was yet capable to trim the outgo of its puck sensors to $4,000 portion making them much robust. But arsenic newer rivals with solid-state lidar sensors — including Ouster, founded successful 2015 — entered the automotive space, the aboriginal person fell behind.

Velodyne inactive owns captious lidar patents, and it hasn't hesitated to enforce them. The institution sued Ouster for patent infringement earlier this year, and brought a related enactment earlier the U.S. International Trade Commission seeking to artifact Ouster from importing its lidar units into the United States. (Ouster's lidar units are made successful Thailand by declaration shaper Benchmark Electronics.)

The companies volition clasp a associated webcast astatine 8:30 a.m. ET connected Monday to sermon the merger. Ouster volition study its third-quarter results aft the U.S. markets adjacent connected Monday; Velodyne is scheduled to study its results aft markets adjacent connected Tuesday.